THIS LOAN
AGREEMENT (this “Agreement”) is made and entered
into as of September 4, 2008, by and between SUPERIOR
BANCORP , a Delaware corporation
(“Borrower”), and COLONIAL BANK
(“Lender”), and has reference to the following
facts and circumstances:
A. Borrower has
applied for a revolving credit loan from Lender in the principal
amount of up to $10,000,000.
B. Lender is
willing to make said revolving credit loan to Borrower upon, and
subject to, the terms, provisions and conditions hereinafter set
forth.
NOW, THEREFORE, in
consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby mutually agree and promise
as follows:
The
“Term” of this Agreement shall commence on the
date hereof and shall end on September 3, 2009 (which, if such
blank is not filled in, shall be twelve months from the date of
execution of this Agreement), unless earlier terminated upon the
occurrence of an Event of Default under this Agreement. All
representations and warranties made herein shall survive
termination and termination shall not affect a party’s rights
with respect to any prior breach of any term, agreement, covenant,
representation or warranty contained herein.
In addition to the
terms defined elsewhere in this Agreement or in any Exhibit or
Schedule hereto, when used in this Agreement, the following terms
shall have the following meanings (such meanings shall be equally
applicable to the singular and plural forms of the terms used, as
the context requires):
Act shall
have the meaning ascribed thereto in Section 9.17.
Attorneys’ Fees means the reasonable value of the
services (and costs, charges and expenses related thereto) of the
attorneys employed by Lender (including, without limitation,
attorneys who are employees of Lender) from time to time to
represent Lender (a) in the preparation or amendment of this
Agreement and the other Transaction Documents, (b) in any
litigation, contest or proceeding or to take any other action in or
with respect to any litigation, contest or proceeding (whether
instituted by Lender, Borrower or any other Person and whether in
bankruptcy or otherwise) in any way or respect relating to this
Agreement or any of the other Transaction Documents, Borrower,
Subsidiary Bank, any Subsidiary, or any other Obligor, and
(c) to enforce any of Lender’s rights to collect any of
the Obligations; provided, that such Attorneys’ Fees shall be
determined on the basis of rates then generally applicable to the
attorneys (and all paralegals, accountants and other staff employed
by such attorneys) employed by Lender, which may be higher than the
rates such attorneys (and all paralegals, accountants and other
staff employed by such attorneys) charge Lender in certain
matters.
1
Birmingham
Banking Day shall mean any day (other than a Saturday or
Sunday) on which commercial banks are open for business in
Birmingham, Alabama.
Business
Day shall mean any day except a Saturday, Sunday or legal
holiday observed by Lender.
Capitalized
Lease shall mean any lease which, in accordance with GAAP and
any more stringent requirements under regulations applicable to
Borrower or Subsidiary Bank consistently applied, is required to be
capitalized on the balance sheet of the lessee.
Change in
Control shall mean any of the following events: (a) the
acquisition at any time by a “person” or
“group” (as such terms are used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 [the
“Exchange Act”]) of beneficial ownership (as
defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities representing more than Fifty Percent
(50%) of the combined voting power in the election of directors of
the then outstanding securities of Borrower or any successor of
Borrower; (b) during any period of two (2) consecutive years
or less, the individuals who at the beginning of such period
constituted a majority of the board of directors cease, for any
reason other than death, disability or retirement to constitute a
majority of Borrower’s board of directors, unless the
election of or nomination for election of each new director during
such period was approved by a vote of at least a majority of the
directors still in office who were directors at the beginning of
the period; (c) approval by the stockholders of Borrower of
any sale or disposition of substantially all of the assets or
earning power of the Borrower; or (d) approval by the
stockholders of Borrower of any merger, consolidation, or statutory
share exchange to which Borrower is a party and as a result of
which the persons who were stockholders of Borrower immediately
prior to the effective date of the merger, consolidation or share
exchange shall have beneficial ownership of less than Fifty Percent
(50%) of the combined voting power in the election of directors of
the surviving corporation.
Code shall
mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed to also refer to any
successor sections.
Collateral
shall have the meaning ascribed to such term in the
Pledge.
Colonial Bank
Base Rate shall mean the interest rate announced from time to
time by Lender as the “Colonial Bank Base Rate”. The
Colonial Bank Base Rate is a reference rate established by Lender
for use in computing and adjusting interest. It is subject to
increase, decrease or change, and is only one of the reference
rates or indices that the Lender uses. The Lender may lend to
others at rates of interest at, or greater or less than the
Colonial Bank Base Rate or the rate provided herein. The Colonial
Bank Base Rate may change as often as daily. Any change in the
interest rate resulting from a change in the Colonial Bank Base
Rate shall take effect upon the change in the Colonial Bank Base
Rate.
Advance
shall have the meaning ascribed thereto in
Section 3.02(a).
Consolidated
Subsidiary shall mean with respect to any Person at any date,
any Subsidiary or other entity the assets and liabilities of which
are or should be consolidated with those of such
2
Person in its
consolidated financial statements as of such date in accordance
with GAAP and any more stringent requirements under regulations
applicable to Borrower or Subsidiary Bank consistently
applied.
Default
shall mean an event or condition the occurrence of which would,
with the lapse of time, the giving of notice, or both, become or
constitute an Event of Default as defined in Section 8
hereof.
Distribution in respect of any corporation or other entity
shall mean: (a) dividends or other distributions on or in
respect of any of the capital stock or other equity interests of
such corporation or other entity; and (b) the redemption,
repurchase or other acquisition of any capital stock or other
equity interests of such corporation or other entity or of any
warrants, rights or other options to purchase any such capital
stock or other equity interests.
Environmental
Laws shall have the meaning ascribed thereto in
Section 9.04.
Environmental
Lien shall have the meaning ascribed thereto in
Section 6.10(g).
ERISA
shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to
time (references to sections of ERISA shall be construed to also
refer to any successor sections).
ERISA
Affiliate shall mean any corporation, trade or business that
is, along with Borrower, a member of a controlled group of
corporations or a controlled group of trades or businesses, as
described in Sections 414(b) and 414(c), respectively, of the Code
or Section 4001 of ERISA.
Event of
Default shall have the meaning ascribed thereto in
Section 8.
GAAP shall
mean, at any time, generally accepted accounting principles at such
time in the United States.
Indebtedness of any Person shall mean and include all
obligations of such Person which in accordance with GAAP and any
more stringent requirements under regulations applicable to
Borrower or Subsidiary Bank consistently applied are or should be
classified upon a balance sheet of such Person as liabilities of
such Person, including any and all contingent obligations,
indebtedness and/or liabilities of such Person, as long as they are
reflected on the balance sheet of such Person and any and all
obligations of such Person under any Capitalized Lease.
lndemnitee
shall have the meaning ascribed thereto in
Section 9.05.
Indemnified
Liabilities shall have the meaning ascribed thereto in
Section 9.05.
Lien shall
mean any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether
such interest is based on common law, statute or contract,
including, without limitation, any security interest, mortgage,
deed of trust, pledge, lien or other encumbrance of any kind or
nature whatsoever, any conditional sale or trust receipt and any
lease, consignment or bailment for security purposes.
3
Loan shall
have the meaning ascribed thereto in Section 3.01.
Material
Adverse Effect shall mean (a) a material adverse effect on
the Properties, assets, liabilities, business, operations,
prospects, income or condition (financial or otherwise) of
Borrower, Subsidiary Bank, and/or any Subsidiary, (b) material
impairment of the ability of Borrower, Subsidiary Bank, and/or any
Subsidiary to perform any of its obligations under this Agreement,
the Note or any of the other Transaction Documents or
(c) material impairment of the enforceability of the rights
of, or benefits available to, Lender under this Agreement, the
Note, the Pledge or any of the other Transaction
Documents.
Money
Markets shall mean one or more wholesale funding markets
available to and selected by Lender, including negotiable
certificates of deposit, commercial paper, Eurodollar deposits,
bank notes, federal funds, interest rate swaps or
others.
Multiemployer
Plan shall mean a “multiemployer plan” as defined
in Section 4001(a) (3) of ERISA which is maintained for
employees of Borrower, any other Obligor, any ERISA Affiliate,
Subsidiary Bank, or any Subsidiary.
Note shall
mean the Revolving Credit Note to be executed and delivered to
Lender pursuant to Section 3.01, as the same may from time to
time be amended, modified, extended or renewed.
Notice of
Borrowing shall have the meaning ascribed thereto in
Section 3.03(a).
Obligations shall mean any and all indebtedness, liabilities
and obligations of Borrower to Lender under this Agreement, the
Note, the Pledge, any of the other Transaction Documents, or any
other agreement, instrument or document heretofore, now or
hereafter executed and delivered by Borrower to Lender, in each
case in connection with or contemplated by the Transaction
Documents, now existing or hereafter arising, absolute or
contingent, joint and/or several, secured or unsecured, direct or
indirect, expressed or implied in law, contractual or tortious,
liquidated or unliquidated, at law or in equity, or otherwise, and
whether created directly or acquired by Lender by assignment or
otherwise, and any and all costs of collection and/or
Attorneys’ Fees incurred or to be incurred in connection
therewith.
Obligor
shall mean Borrower and each other Person who is or shall become
primarily or secondarily liable, by guaranty or otherwise, on any
of the Obligations or who grants Lender a Lien upon any Property or
assets of such Person as collateral for any of the
Obligations.
OTS shall
mean the United States Department of Treasury, Office of Thrift
Supervision.
Capital
Guidelines shall have the meaning ascribed thereto in
Section 6.09.
PBGC shall
mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension
Plan shall mean any “pension plan” as such term is
defined in Section 3(2) of ERISA which is subject to the
provisions of Title IV of ERISA and which is established or
maintained by Borrower, any other Obligor, any ERISA Affiliate,
Subsidiary Bank, or any Subsidiary, other than a Multiemployer
Plan.
4
Permitted
Liens shall mean (a) Liens securing government deposits at
Subsidiary Bank; (b) Liens on Property or assets which secure
loans or other extensions of credit made by Subsidiary Bank or any
Subsidiary in the ordinary course of their banking business;
(c) Liens on Property or assets acquired by Subsidiary Bank or
any Subsidiary by foreclosure or by deed in lieu of foreclosure in
the ordinary course of their banking business; (d) Liens for
taxes, assessments and other governmental charges that are not yet
delinquent or are being contested in good faith; (e) purchase
money Liens related to purchase of capital assets not to exceed
$500,000; (f) Liens assumed in connection with acquisitions or
mergers as long as such acquisition or merger is permitted by the
terms of this Agreement; (g) statutory Liens of landlords,
carriers, warehousemen, mechanics, suppliers, material men, or
other like Liens incurred in the ordinary course of business and
which are not yet delinquent or are being contested in good faith;
(h) Liens incurred in the ordinary course of business in connection
with workers’ compensation and unemployment insurance and
other types of social security; (i) Liens incurred or deposits
made to secure performance or tenders, bids, leases, statutory
obligations, utility services, progress payments and the like;
(j) the refinancing of any Liens permitted by this Agreement,
and (g) the Liens described on Schedule 5.12
attached hereto.
Person
shall mean an individual, partnership, corporation, limited
liability company, trust, unincorporated organization or
association, and a government or agency or political subdivision
thereof.
Pledge
shall mean the Stock Pledge Agreement dated as of the date hereof
to be executed by Borrower and delivered to Lender pursuant to
Section 4 hereof as the same may from time to time be
amended.
Property
shall mean any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible and
Properties shall mean any or all of the foregoing. For
purposes of this Agreement, Borrower, Subsidiary Bank, and any
Subsidiary, as the case may be, shall be deemed to be the owner of
any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement
pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes.
Regulatory
Agency shall mean any Federal, state or local governmental or
regulatory agency, authority, entity or official having
jurisdiction over the banking or other related activities of
Borrower, Subsidiary Bank, and/or any Subsidiary including, without
limitation (to the extent applicable), The Board of Governors of
the Federal Reserve System, the OTS, and the Federal Deposit
Insurance Corporation.
Related
Party shall mean any Person which directly or indirectly
through one or more intermediaries controls, or is controlled by or
is under common control with, Borrower, Subsidiary Bank, or any
Subsidiary. The term “control” shall include the
possession, directly or indirectly, of the power to vote Ten
Percent (10%) or more of the capital stock of any Person or the
power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
Reportable
Event shall have the meaning ascribed thereto in
ERISA.
SEC shall
mean the United States Securities and Exchange
Commission.
5
Subsidiary
shall mean any corporation or other entity of which more than Fifty
Percent (50%) of the issued and outstanding capital stock or other
equity interests entitled to vote for the election of directors,
managers or other persons performing similar functions (other than
by reason of default in the payment of dividends or other
distributions) is at the time owned directly or indirectly by
Borrower, Subsidiary Bank, or any Subsidiary or which under GAAP
and any more stringent requirements under regulations applicable to
Borrower or Subsidiary Bank, consistently applied, is required to
be consolidated with any such entity on its balance sheet and
Subsidiaries shall mean any or all of the
foregoing.
Subsidiary
Bank shall mean as of the effective date of this Agreement,
Superior Bank, a Federal savings bank; provided, that, this
definition may be amended in the future to reflect any other
Subsidiary Bank that Borrower acquires.
Term shall
have the meaning ascribed thereto in Section 1.
Transaction
Documents shall mean this Agreement, the Note, the Pledge, and
all other agreements, documents, instruments and certificates
connected with or otherwise relating to this Agreement or the Loan
made hereunder, all as the same may from time to time be amended,
modified, extended or renewed.
3.01 Commitment
of Lender. Lender hereby agrees to make Borrower a revolving
credit loan in the original principal amount of up to Ten Million
Dollars ($10,000,000.00) (the “Loan”) , which
Loan, or any portion thereof, may be repaid and, subject to the
terms and conditions hereof (and as long as no Event of Default
exists), reborrowed to, but not including, the last day of the
Term. The aggregate principal amount which Borrower may have
outstanding under the Loan at any one time shall not exceed Ten
Million Dollars ($10,000,000.00), which amount may be borrowed,
paid, reborrowed and repaid in whole or in part. The Loan shall be
evidenced by the Revolving Credit Note of Borrower dated the date
of this Agreement, payable to the order of Lender in the principal
amount of $10,000,000.00, having a maturity date of the last day of
the Term, and in the form attached hereto and incorporated by
reference as Exhibit A (as the same may from time to
time be amended, modified, extended or renewed, the
“Note”). Borrower agrees to pay in full all
interest, principal fees, charges and all other amounts due under
the Note and Loan on the maturity date of the
Term.
(a) Interest
on each Loan advance (each, an “Advance” ) shall
accrue at the Colonial Bank Base Rate Floating. Interest from the
date of any Advance on the outstanding unpaid principal balance
shall be computed on the basis of a 360 day year by
multiplying the product of the principal amount outstanding and the
applicable rate by the actual amount of days elapsed and dividing
by 360. No Advance may extend beyond the last day of the Term and
all outstanding Advances, including principal, interest, fees
related thereto, must be paid in full on the last day of the Term.
Lender’s internal records of applicable interest rates shall
be determinative in the absence of manifest error. Each Advance
shall be in a minimum principal amount of $100,000.
6
(b) After
maturity of the Loan, whether by reason of acceleration or
otherwise, interest shall accrue on the Loan and be payable on
demand on the entire outstanding principal balance thereof at an
annual rate equal to Twelve Percent (12%). Interest on each Advance
shall be payable quarterly in arrears on each March 31,
June 30, September 30 and December 31, and on the
last day of the Term, or earlier if maturity is accelerated
pursuant to the terms of this Agreement. All payments shall be
applied first to the payment of all accrued and unpaid interest,
with the balance, if any, to be applied to the payment of
principal. Lender’s internal records of applicable interest
rates shall be determinative in the absence of manifest
error.
3.03 Method of
Borrowing.
(a) Borrower
shall give Lender oral or written notice (a “Notice of
Borrowing”) by 10:00 a.m. (Birmingham time) on
(i) the Business Day on which each Advance shall be made. Each
Notice of Borrowing shall specify: (A) the date of such
advance, which shall be a Business Day during the Term, and
(B) the aggregate principal amount of such advance.
(b) A Notice
of Borrowing shall not be revocable by Borrower.
(c) Subject
to the terms and conditions of this Agreement, provided that Lender
has received the Notice of Borrowing, Lender shall (unless Lender
determines that any applicable condition specified in
Section 4 has not been satisfied) make the applicable Advance
to Borrower by crediting the amount of such Advance to a demand
deposit account of Borrower at Lender specified by Borrower (or
such other account mutually agreed upon in writing between Lender
and Borrower) not later than 2:30 p.m. (Birmingham time) on the
Business Day specified in said Notice of Borrowing.
(d) If Lender
makes a new Advance under this Agreement on a day on which Borrower
is required to or has elected to repay all or any part of an
outstanding Advance, Lender shall apply the proceeds of its new
Advance to make such repayment and only an amount equal to the
difference (if any) between the amount being borrowed and the
amount being repaid shall be made available by Lender to
Borrower.
(e) Borrower
hereby irrevocably authorizes Lender to rely on telephonic,
telegraphic, telecopy, telex, electronic mail, or written
instructions of any individual identifying himself or herself as
one of the individuals listed on Schedule 3.03 attached
hereto (or any other individual from time to time authorized to act
on behalf of Borrower pursuant to a resolution adopted by either
the Board of Directors of Borrower and certified by the Secretary
of Borrower) with respect to any request to make an Advance or a
repayment under this Agreement, and on any signature which Lender
believes to be genuine, and Borrower shall be bound thereby in the
same manner as if such individual were actually authorized or such
signature were genuine. Borrower also hereby agrees to defend and
indemnify Lender and hold Lender harmless from and against any and
all claims, demands, damages, liabilities, losses and reasonable
costs and expenses (including, without limitation, reasonable
Attorneys’ Fees and expenses) relating to or arising out of
or in connection with the acceptance of instructions for making
Advances or repayments under this Agreement; unless such claims,
demands, damages, liabilities and losses are caused solely by
Lender’s gross negligence or intentional
misconduct.
7
3.04
Prepayment. Borrower shall be privileged at any time to
prepay all or any portion of the Loan prior to last day of the
Term, without penalty or premium, provided that: (a) partial
prepayments shall be applied to the installments of principal of
the Note in the inverse order of their stated maturities;
(b) on each prepayment date, Borrower shall pay to Lender all
accrued interest on the principal portion of the Loan being prepaid
to and including the date of such prepayment; (c) no Default
or Event of Default under this Agreement shall have occurred and be
continuing; and (d) if an Advance is prepaid due to
acceleration of the Loan upon default or otherwise, Borrower agrees
to pay all of Lender’s costs, and expenses (as determined by
Bank) incurred as a result of such prepayment. Any prepayment of an
Advance shall be in an amount equal to the remaining entire
principal balance of such Advance.
3.05 General
Provisions as to Payments. Borrower shall make each payment of
principal of, and interest on, the Loan and all other amounts
payable by Borrower under this Agreement, not later than 12:00 noon
(Birmingham time) on the date when due and payable, in Federal or
other funds immediately available in Birmingham, Alabama, to Lender
at its address referred to in Section 3.06. All payments
received by Lender after 12:00 noon (Birmingham time) shall be
deemed to have been received by Lender on the next succeeding
Business Day. Whenever any payment of principal of, or interest on,
the Loans or of other amount shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended to the
next succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest
thereon, at the then applicable rate, shall be payable for such
extended time.
3.06 Place of
Payment. Both principal and interest under the Note are payable
to Lender in lawful currency of the United States in Federal or
other immediately available funds at Lender’s banking office
at 100 Colonial Bank Blvd, Montgomery, AL 36117-4244.
3.07 Late
Fees. If Borrower fails to make any payment of any principal of
or interest on any Advance within ten (10) days after the same
becomes due, whether by reason of maturity, acceleration or
otherwise, in addition to all of the other rights and remedies of
Lender under this Agreement and at law or in equity, Borrower shall
pay Lender on demand with respect to each such late payment a late
fee in an amount not to exceed Three Percent (3%) of each late
payment.
3.08 Capital
Adequacy. If, after the date of this Agreement, Lender shall
have determined in good faith that the adoption of any applicable
law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or
administration thereof by any Regulatory Agency, other governmental
or regulatory authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or will have the effect of
reducing the rate of return on Lender’s capital in respect of
its obligations under this Agreement to a level below that which
Lender could have achieved but for such adoption, change or
compliance (taking into consideration Lender’s policies with
respect to capital adequacy), then from time to time Borrower shall
pay to Lender upon demand such additional amount or amounts as will
compensate Lender for such reduction. All determinations made in
good faith by Lender of the additional amount or amounts required
to compensate Lender in respect of the foregoing shall be
conclusive in the absence of manifest error. In determining such
amount or amounts, Lender may use any reasonable averaging and
attribution methods.
8
SECTION 4. PRECONDITIONS TO
LOAN ADVANCES
4.01 Initial
Advance under Loan. Notwithstanding any provision contained
herein to the contrary, Lender shall have no obligation to make the
initial Advance unless Lender shall have received the following,
all in form acceptable to Lender:
(a) this
Agreement and the Note, each executed by a duly authorized officer
of Borrower;
(b) the
Pledge, executed by a duly authorized officer of Borrower, and the
collateral schedule, stock power(s), UCC financing statement, and
such other documents as Lender may require in connection with the
Pledge;
(c) 127,501
shares of the common stock of Subsidiary Bank, representing One
Hundred Percent (100%) of the issued and outstanding common stock
of Subsidiary Bank (as verified by the Secretary of Subsidiary
Bank), said shares to be issued in Borrower’s name and
accompanied by stock powers duly executed in blank by an authorized
officer of Borrower which the signature(s) of such officer(s)
guaranteed; the Certificate of President, duly executed by the
President of Borrower; copies of resolutions of the Board of
Directors of Borrower, duly adopted, which authorize the execution,
delivery and performance of this Agreement and the other
Transaction Documents, certified by the Secretary of
Borrower;
(d) copies of
the Articles or Certificate of Incorporation of Borrower, including
any amendments thereto, certified by the Secretary of State of the
State of Delaware, and copies of the Articles or Certificate of
Incorporation of Subsidiary Bank, including any amendments thereto,
certified by the OTS;
(e) copies of
the By-Laws of Borrower and Subsidiary Bank, including any
amendments thereto, certified by the Secretary of Borrower, and the
Secretary of Subsidiary Bank, respectively;
(f) a
certificate of good standing for Borrower issued by the Secretary
of State of the State of Delaware, and a certificate of corporate
existence for Subsidiary Bank issued by the OTS and a certificate
of FDIC insurance;
(g) an
opinion of counsel from William H. Caughran, Jr., General Counsel
of Borrower, in the form acceptable to Lender;
(h) evidence
that no change in the financial condition of Borrower, Subsidiary
Bank and/or any Subsidiary shall have occurred since June 30,
2008 that could have a Material Adverse Effect; and
(i) such
other agreements, documents, instruments, certificates and
assurances as Lender may reasonably request.
4.02 All
Advances. Notwithstanding any provision contained in this
Agreement to the contrary, Lender shall have no obligation to make
any Advance under this Agreement unless:
9
(a) Lender
shall have received a Notice of Borrowing for such Revolving Credit
Loan as required by Section 3.03(a);
(b) both
immediately before and immediately after giving effect to such
Advance, no Default or Event of Default shall have occurred and be
continuing;
(c) no change
in the Properties, assets, liabilities, business, operations,
prospects, income or condition (financial or otherwise) of
Borrower, Subsidiary Bank and/or any Subsidiary which may have a
Material Adverse Effect shall have occurred since the date of this
Agreement and be continuing; and
(d) all of
the representations and warranties made by Borrower and any
third-parties in this Agreement and/or in any other Transaction
Document shall be true and correct in all material respects on and
as of the date of such Loan as if made on and as of the date of
such Advance (and for purposes of this Section 4.02(d), the
representations and warranties made by Borrower in
Section 5.04 shall be deemed to refer to the most recent
financial statements of Borrower delivered to Lender pursuant to
Section 6.03).
Each request
for an Advance by Borrower under this Agreement shall be deemed to
be a representation and warranty by Borrower on the date of such
Advance as to the facts specified in clauses (b), (c), and
(d) of this Section 4.02.
SECTION 5. REPRESENTATIONS AND
WARRANTIES
To induce Lender
to make the Loan, Borrower hereby represents and warrants to Lender
that:
5.01 Corporate
Existence and Power. Each of Borrower, Subsidiary Bank, and
each Subsidiary: (a) is duly incorporated or organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization; (b) has all
requisite corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted; and (c) is duly qualified to do
business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where
failure to so qualify would have a Material Adverse Effect on its
business, financial condition or operations. Borrower is a Delaware
chartered “savings and loan holding company” as defined
in and within the meaning of 12 U.S.C. §1467a et seq.,
and as such Borrower has filed all necessary reports with and
received all necessary approvals from OTS. Subsidiary Bank is a
“Federal savings association” and an “insured
depository institution”, as those terms are defined in and
within the meaning of 12 U.S.C. §§1462 and 1813 and no
act has occurred which could adversely affect the status of
Subsidiary Bank as an “insured depository institution.”
Subsidiary Bank is a Federal savings bank chartered under 12 U.S.C.
§1464.
5.02 Corporate
Authorization. The execution, delivery and performance by
Borrower of this Agreement, the Note, the Pledge, and the other
Transaction Documents are within the corporate powers of Borrower
and have been duly authorized by all necessary corporate
action.
10
5.03 Binding
Effect. This Agreement, the Note, the Pledge, and the other
Transaction Documents have been duly authorized, executed and
delivered and constitute the legal, valid and binding obligations
of Borrower enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting creditors’ rights
in general.
5.04 Financial
Statements. Borrower has furnished Lender with the following
financial statements, identified by the principal financial officer
of Borrower: (a) consolidated and consolidating balance sheets and
profit and loss statements of Borrower and its Consolidated
Subsidiaries as of December 31, 2007, all certified by
Borrower’s independent certified public accountants, which
financial statements have been prepared in accordance with GAAP and
any more stringent requirements under regulations applicable to
Borrower or Subsidiary Bank consistently applied; and (b) the
Thrift Financial Report (OTS Form 1313) of Subsidiary Bank as
of June 30, 2008, certified by the President or Chief
Financial Officer of Subsidiary Bank. Borrower further represents
that: (1) said financial statements fairly present the
condition of Borrower and its Consolidated Subsidiaries as of the
dates thereof, (2) there has been no change in the condition
or operation, financial or otherwise, of Borrower or any of its
Consolidated Subsidiaries since June 30, 2008 that could have
a Material Adverse Effect, and (3) neither Borrower nor any of
its Consolidated Subsidiaries has any direct or contingent
liabilities which are not disclosed on said financial statements
which could have a Material Adverse Effect.
5.05
Litigation. Except as disclosed in Schedule 5.05
attached hereto, there is no action or proceeding pending or, to
the knowledge of Borrower, threatened against or affecting
Borrower, Subsidiary Bank or any Subsidiary, before any court,
arbitrator or governmental, regulatory or administrative body,
agency or official which could result in any change in the
condition or operation, financial or otherwise, of Borrower,
Subsidiary Bank, or any Subsidiary which may have a Material
Adverse Effect, and neither Borrower, Subsidiary Bank nor any
Subsidiary is in default with respect to any order, writ,
injunction, decision or decree of any court, arbitrator or
governmental, regulatory or administrative body, agency or official
which could have a Material Adverse Effect.
5.06 Pension
and Welfare Plans. Each Pension Plan complies in all material
respects with all applicable statutes and governmental rules and
regulations; no Reportable Event has occurred and is continuing
with respect to any Pension Plan; neither Borrower, Subsidiary
Bank, any Subsidiary, nor any ERISA Affiliate has withdrawn from
any Multiemployer Plan in a “complete withdrawal” or a
“partial withdrawal” as defined in sections 4203 or
4205 of ERISA, respectively; no steps have been instituted by
Borrower, Subsidiary Bank, any Subsidiary, or any ERISA Affiliate
to terminate any Pension Plan; no condition exists or event or
transaction has occurred in connection with any Pension Plan or
Multiemployer Plan which could result in the incurrence by
Borrower, Subsidiary Bank, any Subsidiary,or any ERISA Affiliate of
any material liability, fine or penalty; and neither Borrower,
Subsidiary Bank, any Subsidiary, nor any ERISA Affiliate is a
“contributing sponsor” as defined in Section 4001(a)
(13) of ERISA of a “single-employer plan” as
defined in Section 4001(a) (15) of ERISA which has two or more
contributing sponsors at least two of whom are not under common
control. Neither Borrower, Subsidiary Bank, nor any Subsidiary, has
any contingent liability with respect to any “employee
welfare benefit plans”, as such term is defined in Section
3(a) of ERISA, which covers retired employees and their
beneficiaries.
11
5.07 Tax
Returns. Borrower, Subsidiary Bank, and each Subsidiary have
filed all Federal, state and local income tax returns and all other
tax returns which are required to be filed and has paid all taxes
due pursuant to such returns or pursuant to any assessment received
by Borrower, Subsidiary Bank, and each Subsidiary, except for the
filing of such returns, if any, in respect of which an extension of
time for filing is in effect.
5.08
Subsidiaries. Subsidiary Bank and the other Subsidiaries set
forth on Schedule 5.08 are the only Subsidiaries of
Borrower. Except as disclosed herein, neither Borrower nor
Subsidiary Bank, individually or collectively, owns or
ho
|
